Faced with mounting fiscal pressures, rising inflation, and growing public frustration, the state is under immense pressure to rebuild trust in governance while stabilising the economy.
To meet a major International Monetary Fund (IMF) condition, the federal government plans to collect an additional Rs1.1 trillion in revenue during the next fiscal year through a combination of federal and provincial measures. Yet behind the numbers lies a deeper question: can Pakistan truly reform its system without confronting corruption in all its forms?
The government’s revenue strategy is ambitious. Of the total additional target, approximately Rs680 billion is expected from the federal side, mainly through the Federal Board of Revenue (FBR) and a substantial increase in petroleum levy.
Simultaneously, authorities are planning an aggressive administrative crackdown on tax evasion. Revenue from anti-evasion measures is projected to double to Rs778bn through a “faceless” tax system, stricter audits, digital invoicing, and real-time banking data integration. The sales tax net is also expected to widen by including additional fast-moving consumer goods.
For decades, anti-corruption rhetoric in Pakistan has been loud but fleeting, with crackdowns losing momentum once political interests intervened
Provincial governments, meanwhile, have been assigned roughly Rs400bn in additional revenue responsibilities, including agricultural income taxation, expanded sales tax enforcement, and improved property tax collection.
These reforms are not merely technical adjustments. They represent an acknowledgement that Pakistan’s fiscal crisis is deeply intertwined with corruption, tax evasion, and weak governance structures.
The IMF estimates that corruption, hidden incomes, and tax evasion cost Pakistan nearly Rs3.4tr annually — roughly 3.9pc of GDP.
For decades, anti-corruption rhetoric in Pakistan has been loud but fleeting. Governments have announced crackdowns with dramatic language, only for momentum to dissipate once political interests intervened. What Pakistan requires today is not selective accountability or televised arrests, but a structural and sustainable anti-corruption drive that transforms institutions rather than headlines.
One of the most significant proposed reforms is the public asset declaration system for all officers from Grades 17 to 22 by December 2026. If implemented properly, this measure could fundamentally alter the bureaucratic culture of secrecy that has persisted for decades.
Equally important is the proposal to allow banks access to these declarations to identify glaring discrepancies between income and assets. In a country where modestly paid officials often accumulate unexplained wealth, luxury properties, and foreign assets, financial transparency can no longer be optional.
The urgency of reform becomes clearer when examining recent data. Out of approximately 5.9 million tax returns filed recently, nearly 43 per cent reportedly declared zero income. Such figures expose the scale of underreporting and the weaknesses of enforcement mechanisms.
Another encouraging proposal is to identify the 10 highest-risk government departments by October 2026 for targeted anti-corruption strategies. The proposal for the National Accountability Bureau (NAB) to conduct specialised vulnerability assessments suggests a shift from reactive accountability toward preventive governance. Yet, no anti-corruption framework can succeed unless NAB itself undergoes serious reform.
Pakistan’s accountability history remains scarred by allegations of political engineering, selective prosecutions, and institutional misuse. Proposed amendments to the NAB Ordinance by January 2027 could therefore prove crucial. A transparent and merit-based process for selecting the NAB chairman — involving opposition members, judiciary representatives, and civil society — may help restore credibility to an institution whose public image has suffered considerably.
Transparency within accountability institutions is equally essential. Publishing NAB’s operational procedures, annual statistics, and enforcement records online would ensure that accountability watchdogs themselves remain accountable. Institutions derive legitimacy not merely from legal authority, but from public trust.
Provincial anti-corruption establishments also require urgent strengthening. Corruption is often experienced most directly at district and provincial levels, where citizens interact daily with patwaris, contractors, police officials, staff of lower judiciary, and licensing authorities. Empowering provincial watchdogs with stronger investigative tools and financial intelligence capabilities is therefore utmost necessary.
The same logic applies to state-owned enterprises (SOEs), which have long functioned as centres of inefficiency, patronage, and financial leakage.
Net adjusted losses in Pakistan’s SOE portfolio reportedly rose sharply from Rs30.6bn in FY24 to Rs122.9bn in FY25, according to recent reports. The National Highway Authority alone incurred losses approaching Rs295bn.
Nowhere is the crisis more visible than in the power sector. Distribution company inefficiencies caused by theft and poor recoveries added nearly Rs397bn to circular debt in FY25 alone. Total circular debt has crossed Rs1.5tr, while liabilities to independent power producers and unfunded pension obligations continue to mount. These losses ultimately fall upon taxpayers and consumers already struggling with soaring utility bills.
Equally politically sensitive is the proposed policy to liberalise the sugar market. Repeated sugar crises, price manipulation, hoarding, and controversial export approvals have reinforced public perceptions that economic policymaking frequently serves cartels rather than consumers.
Tax simplification itself is an anti-corruption strategy and another reform proposal under consideration. After all, complex tax systems create fertile ground for bribery, discretionary settlements, and harassment.
Published in Dawn, The Business and Finance Weekly, May 25th, 2026